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The largest sports-betting scandal since the federal ban was overturned more than six years ago has appeared to change public opinion on the industry for the worse and furthered the conversation about where to draw the line on permissible bet types.
From a regulatory perspective, the fallout of the scandal involving a lower-tier NBA player has fueled a modestly successful campaign to ban certain player proposition bets over integrity concerns.
But the U.S. gaming industry has largely maintained that shutting down markets is an ineffective way to police integrity in general.
In an October report, the International Betting Integrity Association appeared to regard the U.S.' skepticism towards player props as unusual.
“There is no meaningful integrity benefit from excluding such markets, which are widely available globally,” the Brussels-based integrity agency said.
“More effective and proportionate approaches to product availability are employed in many jurisdictions that serve to contribute to strong onshore market integrity, high onshore channelization, related taxation and regulatory oversight.”
The same report found that 97 percent of suspicious basketball bets from 2017 to 2023 were placed offshore, and of the 98 markets in its sample that were targeted for potential fixing events, none of them involved player props.
Many on the industry side within the U.S. feel the same.
“Banning bets only pushes people to a different market,” said Brendan Bussmann, managing director with the Las Vegas advisory firm B Global Advisors. “When they can’t get the full experience, they’re going to go somewhere else.
“And I don’t want to be a part of something that doesn't offer any kind of [know your customer] or [anti-money laundering] and is literally funding illegal activities,” Bussmann said.
Still, in the wake of the scandal, the U.S.’ leading sportsbooks appeared to cede ground, when it agreed in October to stop offering under bets for NBA players on two-way contracts.
The change, dubbed the “Jontay Porter rule,” applied to all of the NBA’s partner sportsbooks and was a joint effort between the league and the operators.
Porter, a player with the Toronto Raptors, was banned after a league investigation found that he left games early with alleged injuries or illnesses while associates bet heavily on the underside of his player propositions.
Porter was under an NBA “two-way contract”, which allows players to be easily shuttled between a team’s active roster and a minor league G-League affiliate. That contract features a maximum salary of just over $508,000 for a full season, which is less than half of the league’s standard minimum salary for rookies and almost a quarter of the league’s minimum salary for a player with two years of experience.
So, is the sports-betting industry retreating on props in general?
Joe Maloney, senior vice president of strategic communications with the American Gaming Association (AGA), does not see it that way.
“In the example of the NBA and legal sportsbook operators working together, it’s an example that there are certain opportunities to uphold integrity that do not drive players to the black market,” Maloney said.
“These are certain athletes in certain circumstances where you can eliminate some of these concerns.”
But it does not seem like the squeeze on player prop markets is over.
Maloney acknowledges that there is “more work to do” to convince the public and lawmakers that the system is working and he warns that “offshore bookies are likely cheering any draconian actions that could take place as an overreaction” to scandals.
But what is the difference between a market that can be safely taken off the board and a draconian overreaction?
“We could point to obvious overreactions which would be outright elimination of prop bets,” Maloney said. “That really disenfranchises the legal sports-betting customer who wants to say, ‘gosh I wish Steph Curry is going to have five three-pointers’. That’s a fun way to watch an electric talent play basketball.”
Somewhere in between banning all props and banning selected "under" bets, there is the ongoing push by the National Collegiate Athletic Association (NCAA) to ban player prop markets for all college sports.
It is here that the backlash against props has been most strongly felt.
Louisiana, Ohio, Maryland and Vermont have all banned college player props in the past year, in the wake of insider betting scandals at the collegiate level.
The Wyoming Gaming Commission last month decided to keep prop bets on college athletes but approved new regulations to put any gambler found to have harassed a college athlete onto the state’s involuntary exclusion list.
The NCAA has been pushing for more states to do the same. The so-called SAFE Bet Act, introduced in the U.S. House and Senate in September, also includes an outright ban on college player props.
Insider betting may have encouraged some states to rethink collegiate player prop markets, but the NCAA also cites another factor in its argument against the availability of prop bets on college sports.
“We’ve seen an increase in student athlete harassment,” said Clint Hangebrauck, the NCAA’s managing director of enterprise risk management, citing examples of players being harassed on social media or in person over the result of a bet.
At the same time, Hangebrauck said college sports are different from the pros from an integrity perspective, not just because the athletes are not directly paid.
“Student-athletes are going to be engaging every day with other students in the class,” he said. “They’re going to be at restaurants, dining halls, a lot of community events.”
But the sports-betting industry does not seem as likely to voluntarily accept a ban on collegiate player props as opposed to certain wagers on a very small number of NBA players.
For one thing, college props is a much larger market. A financial note from Citizens JMP Securities estimated that banning the market could cost the industry as much as $200m a year in revenue.
“I think leagues and players and operators all are a part of this ecosystem and have their own purposeful roles, but we need to see what is the best-case scenario and not have knee-jerk reactions,” Bussmann said.
Hangebrauck noted the NCAA is doing a lot more than pushing for bans: it has player education programs and anti-harassment schemes and has called for offshore operators, as well as “quasi sports-betting operators”, to be shut down.
But reaching out to states and lobbying for bans is part of the playbook as well, and it seems to be gaining momentum.
“I do think it’s a message that’s resonating, particularly with gaming commissions but also with legislators,” Hangebrauck said. “There’s a lot of interest in this topic and a lot of agreement with us.”
That raises a question for 2025 and beyond: will the industry’s willingness to work with leagues and take down certain markets lend it credibility, or encourage further bans?
